Tackle the Test: Free-Response Questions

  1. Question

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    Consider the information provided below for the hypothetical country of Zeta.Tax revenues = $2,000Government purchases of goods and services = $1,500Government transfers = $1,000Real GDP = $20,000Potential output = $18,000

    Rubric for FRQ 1 (8 points)

    1 point: Negative

    1 point: −$500

    1 point: Expansion

    1 point: Real GDP > potential output

    1 point: No

    1 point: Zeta is running a budget deficit during an expansion.

    1 point: It is larger.

    1 point: Because if real GDP equaled potential output, tax revenues would be lower and government transfers would be higher.

  2. Question

    TXB0nrpUTOfWAuKq1cuisy7hWN2HIOCH9mb0/lRs2sMzOoD9J3Kxn7lAGlkWP+dv+sSJYNhJHUnqPMOnQLYdEWTQLeKCypbX/l2myr70RrFk9I6H3Ssa6FFt3YOpes1rzBcejOsecYLZMObZ9X72LeXrYkkg1LezK4mwaEL9CWloKz+cfN7mFbawF/jClLBxK4wR/tE5PKBuI9ZRnW8KxC4YLCbYn753vspiEZd+BFMMWhvKjh7NrfmyYE7y66sS3bcddoWMTLyTR9gbsRj8GRZ3THvLFFzCuHXLW7meJXHY85cEb3UHqBIcIwkv+5MUVkb+UQmkrfuq72orXTQV+/ARfLUgsHyC0PRp6CS9E8PchUtfZCuAYPmgV1otcX/9Whw9l4JWKgR9ZWiJaQk2/xGWe2bTdg4hDkUiRBFC+kdglPKE8+vGqPxdBCzLW541j8vzWvrre1SVAUJi4HP4UQi0H5vednpHiRpbJnoTNiBrLkCNY0n2lOY4yJZ/ZKu0H53SA5NYzLCcdbTM1rXYIQVj59D43a4AztJQ2WYXNqXvg5Reasfa04hBSZMOiEWZW46fABXGOR+OnPdazA2rbzWuTJ8=